Iraq and Iran Strike Deal To Resume Gas Supply, Tackling Power Crisis

Iraqi Prime Minister Mohammed Shia’ al-Sudani announced on Tuesday a newly signed agreement between Iraq and Iran to alleviate a power supply crisis. In a televised address on the official Iraqiya channel, al-Sudani explained that the agreement would involve Iraq supplying black oil to Iran in return for gas. This evening, Iran will resume pumping 10 million cubic meters of gas, returning supply to previous levels.

Al-Sudani attributed the gas crisis with Iran to US sanctions, which prohibited the Iraqi government from transferring funds for imported Iranian gas, leading Iran to cut the gas supply by over 50%. Despite this, al-Sudani stated that current domestic gas production projects, including deals with French company TotalEnergies and other initiatives in the southern province of Basra, will eliminate the need for imported gas for power stations within two to three years.

Iraq regularly imports Iranian gas to power stations nationwide. However, Iran occasionally reduces the gas supply due to Iraq’s accumulated debt.